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Farm aid package a 'small Band-Aid on a big wound,' farmers say

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Soybean growers will receive the largest payments, followed by pork farmers. The corn, wheat, sorghum and dairy industries are also on the list.Soybeans are harvested. File Photo courtesy of Pixabay

By Jessie Higgins, UPI
EVANSVILLE, Ind

The U.S. Department of Agriculture began accepting farmer's applications for tariff relief Tuesday.

Though grateful for the assistance, farmers say the amount of aid promised falls far short of the losses they will sustain this year.

"This appears to be a small Band-Aid on a big wound," said Randy Souder, a corn and soybean farmer in Iowa. "It'll pay the interest on a loans the younger farmers have on machinery and land. It will put off the banks for a year or so -- maybe."

For some commodities, the program is expected to pay farmers roughly half of their projected losses. Other industries will see smaller payments.

The USDA announced details of the aid package, which it's calling the Market Facilitation Program, on Sept. 27. Soybean growers will receive the largest payments, followed by pork farmers. The corn, wheat, sorghum and dairy industries are also on the list.

This initial aid package releases roughly half of the $12 billion President Donald Trump promised farmers earlier this year. It's unclear if or when the rest of the money will be distributed.

The money will help offset losses farmers are sustaining because of the United States' ongoing trade war with China. China was America's largest importer of soy and second largest importer of pork before its government placed large tariffs on both commodities this summer in retaliation for the Trump administration's tariffs on Chinese goods. Trade between the two countries has since plummeted, causing severe price drops in American soy, pork and other commodities.

Economists say prices will remain low until trade between the two countries is restored.

"We're thankful for the aid coming," said Gary Asay, an Illinois pig farmer, who also grows corn and soybeans. "But we need trade."

Soybean prices were hit hardest, dropping about $1.80 per bushel, which is nearly 20 percent. The Market Facilitation Program will reimburse farmers for nearly half their expected losses, paying $1.65 per bushel on 50 percent of their total fall harvest, said Chad Hart, an economist at Iowa State University.
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Harvest season has begun in some parts of the Midwest, and it will continue through September and into October.

"It helps as a short-term cash infusion, but it doesn't impact the long-term impact we will see if prices don't rebound," Hart said. "This is a Band-Aid, but now we're looking for what's the long-term cure?"

The program offers a similar deal to pork producers, paying $8 per head on half the animals in their possession Aug. 1, Asay said. This will be a much smaller cut for hog farmers, who are also suffering from the ongoing trade dispute with Mexico, America's number one importer of pork.

"Hog farmers are losing $15-$25 on every hog their selling now," Asay said. "Pig farmers are taking substantial losses on every pig they sell."

Farmers are hopeful the United States will soon reach a trade deal with Mexico and Canada, which will help restore hog prices. Trump announced last week his administration had reached a preliminary trade deal with Mexico, and that it was negotiating with Canada. The countries have yet to reach a final deal. And there have been few signs of an end to the trade battle with China.

"There is some light at the end of the tunnel," Asay said. "But it doesn't look good overall now.

"Farmers are generally upbeat about supporting the president and what he is trying to do with negotiating trade deals. But agricultural production in the United States is really good, and we need exports. We match our production to international demand, so these tariffs really do hurt. We're just trying to do what we can to survive."